Creating an Enabling Legal Framework for REDD+ Investments in Kenya

ABOUT THIS REPORT
1. THE KENYAN REDD+ LAW PROJECT
1.1 About the REDD+ Law Project
1.2 Contributions from Kenyan advisors and institutions
1.3 Sponsor of this output of the Kenyan REDD+ Law Project
2. LIST OF AUTHORS
3. ACKNOWLEDGEMENTS
4. A NOTE ON REFERENCING
5 DISCLAIMER
PART A: KEY ISSUES AND RECOMMENDATIONS FOR CREATING AN ENABLING LEGAL FRAMEWORK FOR REDD+ INVESTMENTS IN KENYA
EXECUTIVE SUMMARY
1. OVERVIEW OF REDD+ LAW AND GOVERNANCE ISSUES
1.1 An international climate policy that relies upon national implementation
1.2 Elements of national REDD+ policy
1.2.1 Specific issues that need to be addressed in national REDD+ policy
1.2.2 Policy questions for designing a national REDD+ policy
1.3 Legal aspects of national REDD+ implementation
1.3.1 The ‘form’ and ‘content’ of REDD+ legal frameworks
1.3.2 Specific UNFCCC requirements
1.3.2.1 Phased implementation
1.3.2.2 National institutional framework
1.3.2.3 The Cancun safeguards
1.3.2.4 Measurement, reporting and verification (MRV)
1.3.2.5 Conditions for REDD+ finance
1.3.3 ‘Carbon rights’ and ‘benefit sharing’ in the context of REDD+
1.3.3.1 Carbon rights
1.3.3.2 Benefit sharing
2. ISSUES AND RECOMMENDATIONS FOR DEVELOPING AN ENABLING FRAMEWORK FOR REDD+ INVESTMENTS IN KENYA
2.1 Kenya’s REDD+ policy framework and objectives
2.2 Existing Kenyan legal frameworks as a foundation for REDD+ implementation
2.2.1 Content of the law
2.2.2 Form of the law
2.3 Some specific legal issues to clarify
2.3.1 Carbon rights
2.3.1.1 Ownership/use rights of physical forest carbon
2.3.2.2 Ownership of the emissions reductions
2.3.2 Benefit sharing
2.3.2.1 Determining the basis for benefit claims
2.3.2.2 Benefit distribution
2.3.3 Managing different sources of REDD+ finance
2.3.3.1 Issues related to public investments
2.3.3.2 Issues related to private investments
2.4 Recommendations for developing an enabling legal framework for REDD+ investments
PART B: BACKGROUND REPORTS
BACKGROUND REPORT 1:
OVERVIEW OF KENYAN LAW APPLICABLE TO REDD+ IMPLEMENTATION
1. INTRODUCTION
2. OVERVIEW OF REDD+ IN KENYA
2.1 Background
2.2 REDD+ developments in Kenya
2.2.1 Readiness phase
2.2.2 Demonstration activities and REDD+ projects
2.2.3 Key stakeholders in REDD+ in Kenya
2.2.4 Emerging framework for REDD+ governance
2.2.4.1 Climate change governance
2.2.4.2 REDD+ institutions
2.2.4.2a The National REDD+ Steering Committee (RSC)
2.2.4.2b REDD Technical Working Group (TWG)
2.2.4.2c The National REDD+ Coordination Office (NRCO)
2.2.4.2d REDD+ Component Task Forces
2.3 Regulatory framework for REDD+ investment
2.3.1 Policy framework for development, climate change and REDD+
2.3.2 Legal frameworks relevant to different aspects of REDD+ investments
3 BACKGROUND TO KENYA’S LEGAL SYSTEM
3.1 Difference between government policy and law
3.2 Constitutional law
3.2.1 Constitutional history of Kenya: From 1964 to 2010
3.2.2 Overview of the Constitution of Kenya 2010
3.2.3 Devolution of authority
3.2.3.1 Introduction
3.2.3.2 Constitutional provisions on devolution
3.2.3.2a Objectives of devolution
3.2.3.2b Levels of Government in Kenya
3.2.3.2c Cooperation between National and County Governments
3.2.3.2d The Role of the National Assembly and the Senate
3.2.3.2e National Executive
3.2.3.2f County Government
3.2.3.2g County Assembly
3.2.3.2h County Executive Committee
3.2.3.2i Functions of the County Executive Committee
3.2.3.2j Functions of County Assemblies
3.2.3.2k Functions of the National Government
3.2.3.2l Functions of County Government
3.2.3.2m Transfer of functions or powers between the two levels of government
3.2.3.2n Conflict of laws
3.2.3.2o Powers of County Government
3.2.3.2p Transition to a devolved system of government
3.2.3.2q Transition period
3.2.3.2r Effect of Devolution on the Kenyan Legal System
3.2.3.2s Challenges of decentralisation and devolution
3.3 The Law-making process in Kenya
3.3.1 Sources of Kenyan law
3.3.2 Primary legislation
3.3.3 Subordinate Legislation (including Regulations)
3.4 Relationship between customary law and statute law
3.5 Organisation of government
3.5.1 Executive
3.5.2 Legislature
3.5.3 Judiciary
3.5.4 Devolved structure of annex government
4 OVERVIEW OF LAWS, POLICIES AND INSTITUTIONS RELEVANT TO REDD+ IN KENYA
4.1 Land law and policy
4.1.1 Recent changes to Kenya’s land law regime
4.1.2 Key laws governing land
4.1.2.1 The Constitution
4.1.2.2 Land Act 2012
4.1.2.3 Land Registration Act 2012
4.1.2.4 National Land Commission Act 2012
4.1.2.5 Trust Lands Act 1970/Revised 2009
4.1.2.6 Land Control Act 1967/revised 2010
4.1.2.7 Land (Group Representatives) Act 1970/revised 2012
4.1.2.8 Land Adjudication Act 1977/revised 2010
4.1.2.9 Land Consolidation Act 1977/revised 2012
4.1.2.10 Environmental Management and Coordination Act 1999/Revised 2012
4.1.2.11 Forests Act No. 7 2005/Revised 2012
4.1.3 Land classifications
4.1.3.1 Overview
4.1.3.2 Public land
4.1.3.3 Community land
4.1.3.4 Private land
4.1.3.5 Procedure to acquire private land
4.1.3.6 Compulsory acquisition
4.1.3.7 Forest land
4.1.3.7a Forest regime
4.1.3.7b Forest definition
4.1.3.7c Forest ownership and use
4.1.3.7d Tree tenure
4.1.3.7e Soil tenure
4.1.4 Legal Treatment of Women in Kenyan land law
4.1.5 Land administration
4.1.5.1 National Land Commission
4.1.5.2 Environment and Land Court
4.1.5.3 Land Control Board
4.1.5.4 Group representatives
4.1.5.5 Corrupt transactions
4.1.6 Future challenges for Kenyan land law and governance
4.2 Environment laws and regulations
4.2.1 Environmental law and policy in Kenya
4.2.1.1 Introduction to environmental law in Kenya
4.2.1.2 Overview of environmental policies in Kenya
4.2.2 Constitutional provisions relating to the environment
4.2.3 Statutory law with respect to the environment
4.2.3.1 Environmental Management and Coordination Act 1999/Revised 2012
4.2.3.2 Environment and Land Court Act 2011
4.2.3.3 Forests Act 2005
4.2.3.3a General
4.2.3.3b Establishing a forest conservancy or nature reserve under the Forests Act
4.2.3.3c Forest Conservation and Management Bill 2014
4.2.2.4 Forest (Charcoal) Regulations 2009
4.2.2.5 Timber Act 1972/Revised 2012
4.2.2.6 Wildlife (Conservation and Management) Act 2013
4.2.2.7 Protected Areas Act 1980/Revised 2012
4.2.2.8 Water Act 2003
4.2.2.9 Mining Act 1987/revised 2012
4.2.2.10 Agriculture laws
4.2.2.10a Agriculture, Fisheries and Food Authority Act 2013
4.2.2.10b The Crops Act 2013
4.2.2.10c Kenya Agricultural and Livestock Research Act 2013
4.2.2.11 National Museums and Heritage Act 2006
4.2.2.12 Energy Act 2006 and subsidiary legislation
4.2.2.12a Energy Act 2006
4.2.2.12b The Energy (Energy Management) Regulations 2012
4.2.2.12c The Energy (Solar Photovoltaic Systems) Regulations 2012
4.2.2.12d The Energy (Solar water heating) regulations 2012
4.2.2.12e Draft Energy (Improved Biomass Cook stoves) Regulations 2013
4.3 Key environmental governance institutions
4.3.1 Ministry of Environment, Water and Natural Resources
4.3.2 Kenya Wildlife Service (KWS)
4.3.3 Kenya Forest Service (KFS)
4.3.4 Kenya Forestry Research Institute (KEFRI)
4.3.5 National Museums of Kenya
4.3.6 Institutions under the National Environmental Management and Coordination Act
4.3.6.1 The National Environmental Council (NEC)
4.3.6.2 The National Environment Management Authority (NEMA)
4.3.6.3 Provincial and District Environment Management Committees.
4.3.6.4 Public Complaints Committee (PCC)
4.3.6.5 Standards and Enforcement Review Committee (SERC)
4.3.6.6 National Environmental Tribunal (NET)
4.3.6.7 National Environment Action Plan Committee (NEAP)
4.3.7 Environment and Land Court
4.4 Gender issues in Kenyan law
4.5 Financial transparency
4.6 Applicable international treaties
4.6.1 Records of signatory/ratification status in Kenya
4.6.2 Relationship between Kenyan law and international treaties
4.6.3 Overview of applicable environmental treaties
4.6.3.1 International treaties
4.6.3.1a United Nations Framework Convention on Climate Change (UNFCCC)
4.6.3.1b Convention on Biological Diversity (CBD)
4.6.3.1c Convention on Wetlands of International Importance Especially as Waterfowl Habitat
4.6.3.1d The United Nations Convention to Combat Desertification (UNCCD)
4.6.3.1e Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)
4.6.3.1f Convention on the Conservation of Migratory Species of Wild Animals (Bonn Convention
4.6.3.1g United Nations Convention to Combat Desertification in those Countries Experiencing Serious Drought and /or Desertification, Particularly in Africa
4.6.3.2 Regional treaties
4.6.3.2a African Convention on the Conservation of Nature and Natural Resources
4.6.3.2b Convention for the Protection, Management and Development of the Marine and Coastal Environment of the Eastern African Region (Nairobi Convention)
4.6.3.2c Lusaka Agreement on Cooperative Enforcement Operations Directed at Illegal Trade in Wild Fauna and Flora (Lusaka Agreement)
4.6.4 Overview of applicable human rights treaties
4.6.4.1 Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW)
4.6.4.2 International Covenant on Economic, Social and Cultural Rights (ICESCR)
4.6.4.3 African Charter on Human and Peoples’ Rights
4.6.4.4 Protocol to the African Charter on the Rights of Women in Africa
4.6.4.5 United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP)
4.6.4.6 Declaration on the Right to Development (DRD)
4.6.5 Overview of applicable international agreements pertaining to corruption
4.7 Dispute resolution
4.7.1 Environmental litigation
4.7.2 Contractual disputes
5. WHERE CARBON RIGHTS AND BENEFIT SHARING SIT IN KENYA’S LEGAL FRAMEWORK
5.1 Carbon rights
5.1.1 Ownership/use rights of physical forest carbon
5.1.2 Ownership of the emissions reductions
5.2 Benefit sharing
5.2.1 Determining the basis for benefit claims
5.2.1.1 Approach to REDD+ implementation will affect the basis of benefit claims
5.2.1.2 Obligations to share benefits from forests
5.2.1.2a Principles relevant to benefit sharing for REDD+
5.2.1.2b Implementing benefit sharing principles
5.2.1.3 Options for establishing benefit claims for REDD+ in Kenya
5.2.2 Benefit distribution
5.2.2.1 Scales of benefit distribution
5.2.2.2 Options for ‘vertical’ benefit distribution
5.2.2.3 Options for ‘horizontal’ benefit distribution
5.2.2.4 Examples of benefit sharing in existing Kenyan forest carbon projects
6 CONCLUSION
BACKGROUND REPORT 2:
MANAGING PUBLIC REDD+ INVESTMENTS IN KENYA
1. INTRODUCTION
2. OVERVIEW OF PUBLIC INVESTMENTS IN REDD+ IN KENYA
2.1 What is public REDD+ finance?
2.2 Multilateral investments by public agencies
2.2.1 UN-REDD Programme
2.2.2 Forest Carbon Partnership Facility (FCPF)
2.3 Bilateral investments by public agencies
2.3.1 Governments of Finland and Kenya
2.3.2 Governments of Japan and Kenya
2.3.3 Governments of United States and Kenya
2.3.4 Governments of France and Kenya
2.4 Funding from the national budget
3. MANAGING PUBLIC FINANCE FOR REDD+ IN KENYA
3.1 Managing grants paid to the Government of Kenya
3.1.1 Key laws applicable to the management of grants
3.1.1.1 Constitution
3.1.1.1a Consolidated Fund
3.1.1.1b Other ‘special purpose’ funds
3.1.1.2 The Public Finance Management Act
3.1.1.3 The County Government Public Finance Management Transition Act, 2003
3.1.2 Allocating public monies between the national and county governments
3.1.3 Oversight of fund management
3.2 Allocating money to REDD+ from Kenya’s national budget
3.2.1 How funds are allocated from the national budget
3.2.2 Financial management in the forest sector
4 MANAGING GRANTS PAID TO CIVIL SOCIETY
4.1 Legal structure of recipient
4.2 Government oversight of payments made by development partners/donors paid directly to civil society or individuals
4.3 Regulation of deposit accounts
4.4 Rights to reclaim funds in the event that the donor-recipient contract has been breached
5. TRANSPARENCY LAWS
5.1 REDD+ and corruption
5.2 Corruption Risks for REDD+ in Kenya
5.3 National legal framework for corruption
5.3.1 Constitution
5.3.2 Anti-Corruption and Economic Crimes Act
5.3.3 The Public Officer Ethics Act
5.3.4 Ethics and Anti-Corruption Commission Act
5.3.5 Leadership and Integrity Act
5.3.6 The Penal Code
5.3.7 The Criminal Procedure Code
5.3.8 Proceeds of Crime and Ant-Money Laundering Act
5.3.9 The Public Finance Management Act
5.3.10 Public Procurement and Disposal Act
5.3.11 The Banking Act
5.3.12 The Foreign Judgment (Reciprocal Enforcement) Act
5.3.13 The Civil Procedure Act
5.3.14 Anti-corruption in the forest sector
5.4 International legal framework for corruption
5.4.1 The AU Convention on Preventing and Combating Corruption
5.4.2 United Nations Convention Against Corruption (UNCAC)
5.4.3 The African Charter on Democracy, Elections and Governance
5.4.4 International Policy and Structural Mechanisms
6. CONCLUSION
BACKGROUND REPORT 3:
ENGAGING THE PRIVATE SECTOR IN REDD+ IMPLEMENTATION IN KENYA
1. INTRODUCTION
2. OVERVIEW OF PRIVATE SECTOR ENGAGEMENT IN REDD+
3. REGULATORY ISSUES RELATED TO COMMERCIAL REDD+ PROJECTS
3.1 Overview
3.2 General issues for commercially viable REDD+ project design
3.2.1 Baselines and additionality
3.2.2 Community and biodiversity benefits
3.2.3 Leakage
3.2.4 Permanence
3.2.5 Structuring of the project
3.3 Project-level lessons from early market experience
3.3.1 Importance of Strong Legal Frameworks for REDD+ Projects
3.3.2 Regulatory Processes
3.3.2.1 Formal Approval Processes for REDD+ Projects
3.3.2.2 Compliance with Voluntary Standards
3.4 Issues specific to commercial REDD+ projects
3.4.1 Government approval required to transact carbon credits?
4.3.2 Treatment of REDD+ projects (or other activities) within a national programme?
4 PRIVATE INVESTMENT IN THE GREEN ECONOMY
4.1 Business opportunities in the green economy
4.1.1 General points
4.1.2 Payment for Ecosystem Services schemes
4.1.3 Climate-smart agriculture in the ‘green economy’
4.2 Investment climate in Kenya
5. COMMERCIAL LAWS IN KENYA
5.1 Business structures
5.2 Taxation
5.3 Employment
5.4 Insurance
5.5 Contract
5.5.1 Enforceability
5.5.2 Capacity to contract
5.6 Land and carbon rights
6. CONCLUSION
BACKGROUND REPORT 4:
CLIMATE-SMART AGRICULTURE AND REDD+ IMPLEMENTATION IN KENYA
GLOSSARY
1. INTRODUCTION
2. BACKGROUND TO CLIMATE-SMART AGRICULTURE
2.1 The relationship between agriculture, climate change and food security
2.2 What is 'climate-smart' agriculture?
2.3 Climate-smart agriculture and REDD+
2.4 Lessons regarding climate-smart agriculture from existing carbon farming projects
2.4.1 Uptake of climate-smart agricultural practices by local stakeholders
2.4.2 Project design issues that could impede successful implementation
3. AGRICULTURE AND REDD+ IN KENYA
3.1 Kenya's agricultural sector
3.2 Kenyan agriculture and climate-smart agriculture
3.3 Agriculture in Kenya’s REDD+ implementation
3.3.1 Overview of Kenya's REDD+ 'strategy options'
3.3.1.1 Strategy options in the first priority area
3.3.1.2 Strategy options in the second priority area
3.3.1.3 Strategy options in the third priority area
3.3.2 Project-level examples of agriculture’s potential role in REDD+ implementation
3.3.2.1 Carbon farming project developed by a NGO
3.3.2.2 Agricultural development projects by international and national organisations and funders
3.3.2.3 Collective organisation providing capacity building and demonstration actions for its members
3.3.2.4 Public-private partnership testing a strategy that could aid agricultural development
4. REGULATORY FRAMEWORK APPLICABLE TO CLIMATE-SMART AGRICULTURE IN KENYA
4.1 Importance of understanding how policies, laws and regulations could apply
4.2 Policy support for climate-smart agriculture
4.2.1 Food Security
4.2.2 Mitigation and adaptation
4.2.3 Policy options to address agriculture’s impact on the environment
4.3 Legislative framework applicable to climate-smart agriculture in Kenya
4.3.1 Agriculture-specific legislation
4.3.1.1 Crops Act 2013
4.3.1.2 Farm Forestry Rules 2009
4.3.1.3 Agriculture, Fisheries and Food Authority Act 2013
4.3.1.4 Kenya Agricultural and Livestock Research Act 2013
4.3.1.5 Agricultural Development Corporation Act 1965/revised 2012
4.3.2 General legislation
4.3.2.1 Constitution of Kenya 2010
4.3.2.2 Land Act 2012
4.3.2.3 Environmental Management and Co-ordination Act 1999/revised edition 2012
4.3.2.4 Forests Act 2005
4.3.2.5 Water Act 2002
4.3.2.6 Water Resources Management Rules 2007
4.3.2.7 Biosafety Act 2009
4.3.2.8 Energy Act 2006
4.3.2.9 Co-operative Societies Act 2005, revised edition 2012
4.3.2.10 Societies Act 2008
4.3.2.11 Micro and Small Enterprises Act 2012
4.3.2.12 SACCO Societies Act 2008
4.4 Issues for climate-smart agriculture arising from the current regulatory framework
4.5 Institutional support for climate-smart agriculture
5. CONCLUSION
ANNEXES
Annex 1: Examples of verification procedures under the voluntary standards
Annex 2: Kenyan Constitutional History
Annex 3: Procedures for Public Bills and Private Bills in Kenya
Annex 4: Procedure for Acquisition of Private Land in Kenya
Annex 5: Kenyan land tenure classifications presented in tables
5.1 Summary
5.2 Private land table
5.3 Public land table
5.4 Community land table
5.5 Forest land table
Annex 6: Kenyan business structures presented in tables
6.1 Summary
6.2 Company limited by guarantee
6.3 Bare Trust
6.4 Society
6.5 Non-governmental organisation
Annex 7: Carbon rights in Australian legislation
Annex 8: REDD+ and other forestry projects in Kenya
Annex 9: Cancun safeguards
Annex 10: Further details regarding Payment for Ecosystem Services Schemes
SELECTED REFERENCES